FRP (US:FRPH)2021-03-19 20:31Financial Performance - The Company completed the disposition of 40 industrial warehouse properties for $347.2 million and an additional property for $11.7 million, leaving only two commercial properties in the Asset Management Segment[13]. - The Company anticipates continued adverse impacts on its mixed-use properties in Washington, D.C. due to COVID-19 restrictions, affecting financial condition and cash flows[28]. - The Company’s revenues are influenced by cyclical construction sector activity, which is affected by various economic factors[36]. - The Company faces risks related to the inability to renew leases or re-lease properties, which could adversely affect cash generated before debt repayments[43]. - The Company faces competition from numerous developers and operators, which may pressure rental rates and affect financial performance[56]. - The Company’s debt service obligations may restrict business operations and lead to potential defaults if cash flows are insufficient[51]. - The transition from LIBOR to an alternative reference rate may impact interest expenses and financial results, requiring careful implementation[52][54]. - The Company has not paid cash dividends historically and does not plan to do so in the near future[82]. - The Company reported total investments of $75.609 million in corporate bonds, with fair value subject to fluctuations in interest rates impacting comprehensive income[55]. Asset Management - The Asset Management Segment includes three commercial properties, with 34 Loveton Circle being 95.1% occupied and Cranberry Run Business Park at 87.6% occupancy[64][65]. - The Company’s business strategy includes re-deploying warehouse portfolio sales proceeds into various asset classes with growth potential[13]. - The company owns approximately 20,000 acres of land across Florida, Georgia, Maryland, Virginia, South Carolina, and the District of Columbia, held in four segments: Asset Management, Mining Royalty Lands, Development, and Stabilized Joint Venture[63]. - The company sold 40 industrial warehouse properties for $347.2 million and an additional property for $11.7 million, marking a strategic shift and reclassification of these properties as discontinued operations[66]. Environmental and Regulatory Issues - The Company has incurred significant environmental costs related to the RiverFront on the Anacostia development site, with an estimated remediation expense of $2.0 million recorded[40]. - The Company’s operations are subject to environmental laws, and violations could result in substantial fines or penalties[37]. - The Company is engaged in a redevelopment project at 680 Rhode Island Avenue, having removed three underground storage tanks and is addressing potential contamination issues[75]. Debt and Financing - As of December 31, 2020, the company had outstanding non-recourse mortgage indebtedness of $90 million, secured by developed real estate properties with a carrying value of $89.964 million[49]. - The company has long-term fixed-rate debt scheduled for maturity totaling $90 million, with an average interest rate of 4.125%[90]. - Scheduled maturities of long-term debt include $127,000 in 2021, $1.556 million in 2022, $1.622 million in 2023, $1.690 million in 2024, and $1.761 million in 2025[90]. - The total fair value of the company's long-term debt is reported at $89.964 million[90]. - The Company has no variable rate debt outstanding as of December 31, 2020, mitigating interest rate risk[89]. Corporate Governance and Compliance - The company conducted an evaluation of its internal control over financial reporting, concluding that it was effective as of December 31, 2020[95]. - There were no changes in internal control over financial reporting during the fourth quarter of 2020 that materially affected its effectiveness[97]. - The company has adopted a Financial Code of Ethical Conduct applicable to its principal executive officers and financial officers[101]. - There were no disagreements with accountants on accounting and financial disclosure[92]. - The company plans to file its Proxy Statement with the Securities and Exchange Commission by March 31, 2021[102]. - The financial statements include a report from Hancock Askew & Co., LLP, confirming the accuracy of the consolidated financial statements as of March 19, 2021[123]. - The financial statement schedule presents information fairly in all material respects, as per the independent auditor's opinion[124]. - The company has a history of filing Form 10-K and Form 10-Q, ensuring compliance with regulatory requirements[121]. Real Estate and Development - The Development Segment has converted 30 building pads into developed buildings since 1990, with a strategy to turn non-income producing properties into income-producing ones[15]. - The Company entered a joint venture with Vulcan Materials in 2006 to develop approximately 4,280 acres in Brooksville, Florida, with zoning approved for 5,800 residential units and over 600,000 square feet of commercial space[71]. - In 2020, 285,000 tons were sold from the Brooksville property, with estimated reserves of 4,326,000 tons as of December 31, 2020[71]. - The Company owns 25 acres in Baltimore capable of supporting 226,750 square feet of warehouse and office space, and 55 acres in Aberdeen for over 625,000 square feet of industrial product[73]. - The first phase of the RiverFront on the Anacostia project, Dock 79, consists of 305 residential units and 18,000 square feet of retail space, completed in July 2017[74]. - The Hampstead Trade Center property was rezoned for residential use in December 2018, with ongoing efforts to secure PUD entitlements[73]. Financial Metrics and Performance Indicators - The gross carrying cost of real estate increased to $246,078 thousand in 2020 from $240,128 thousand in 2019, reflecting an addition of $17,227 thousand during the period[128]. - Accumulated depreciation and depletion rose to $34,248 thousand in 2020, up from $29,788 thousand in 2019, with $5,689 thousand charged to cost and expense during the year[128]. - The balance of real estate sold during the period was $11,060 thousand, compared to $11,630 thousand in 2019[128]. - The total additions during the period were $17,227 thousand, which is a significant increase from $10,353 thousand in 2019[128]. - The balance at the beginning of the period for gross carrying cost was $240,128 thousand, down from $241,413 thousand in 2019[128]. - The company reported a deduction of $217 thousand for other costs during the period[128]. - The total accumulated depreciation at the beginning of the period was $29,788 thousand, which increased due to the charged expenses[128]. - The company had a balance of $34,248 thousand in accumulated depreciation at the close of the period, indicating a consistent increase in asset depreciation[128]. - The real estate sold during the period included deductions of $1,112 thousand, which is a decrease from $3,822 thousand in the previous year[128]. - The total gross carrying cost of real estate has shown a slight fluctuation over the past three years, with a peak in 2018 at $243,165 thousand[128].